Question 9(Multiple Choice Worth 1 points)

The spending multiplier will decrease when the

marginal propensity to consume increases.

marginal propensity to save increases.

interest rates decrease.

savings rate decreases.

investment rate decreases.

Question 14(Multiple Choice Worth 1 points)

If the Federal Reserve decreases the money supply, how will interest rates, the international value of the dollar, and exports be impacted as a result?

Interest Rates / Value of Dollar / Exports

Increase / Decrease / Increase

Increase / Increase / Decrease

Increase / Increase / Increase

Decrease / Decrease / Increase

Decrease / Increase / Decrease

Question 15(Multiple Choice Worth 1 points)

If Congress removes all tariffs on Chinese products in response to a new free trade agreement with China, then

imports will decrease.

aggregate supply will shift left.

aggregate demand will shift left.

resources will be used more efficiently.

fewer Chinese goods and services will be sold.

Question 20(Multiple Choice Worth 1 points)

If a German automaker opens a factory in Arizona, then

German GDP will increase.

US GDP will increase.

German and US GDP will increase.

neither GDP is changed.

US GDP will decrease.

Question 21(Multiple Choice Worth 1 points)

Which of the following would not be counted in the circular flow of an economy?

Consumption spending

Exports to foreign nations

Taxes

Inflation

Imports from foreign nations

Question 22(Multiple Choice Worth 1 points)

In the circular flow diagram, profit flows from the

product market to the firms.

factor market to the firms.

firms to the product market to the households.

product market to the households.

factor market to the households.

Question 28(Multiple Choice Worth 1 points)

If the required reserve ratio is 20 percent and the Fed sells $10 million in securities, then the

money supply will increase by $10 million.

money supply will decrease by $10 million.

foreign investment in US financial assets will decrease.

money supply will increase by $50 million.

money supply will decrease by $50 million.

Question 29(Multiple Choice Worth 1 points)

Economic growth would decrease if

consumer spending decreased.

employee wages increased.

floods ravaged the manufacturing sector in the north.

government spending decreases significantly.

the number of imports increased.